U.S. Stocks Fall as Budget Impasse Offsets Jobless Claims

The Federal Reserve said yesterday it would buy $45 billion of Treasuries per month starting in January in an effort to boost growth. Photographer: Scott Eells/Bloomberg

Dec. 13 (Bloomberg) -- U.S. stocks retreated, snapping a
six-day advance in the Standard & Poor’s 500 Index, as the
standoff in federal budget negotiations overshadowed a decline
in jobless claims and a rebound in retail sales.

Newmont Mining Corp. and Mosaic Co. dropped at least 1.4
percent to pace losses in commodity shares. Phillips 66, the
crude refiner that was spun off from ConocoPhillips in May,
declined 1.6 percent on plans to raise as much as $400 million
in an initial public offering for a minority interest in some of
its pipeline and logistics assets. CVS Caremark Corp. climbed 2
percent after forecasting profit that beat estimates. Best Buy
Co. jumped 16 percent on a report that founder Richard Schulze
will offer to take the company private by Dec. 15.

The S&P 500 fell 0.6 percent to 1,419.45 at 4 p.m. New York
time. The Dow Jones Industrial Average dropped 74.73 points, or
0.6 percent, to 13,170.72. About 6.1 billion shares changed
hands on U.S. exchanges, or in line with the three-month
average, according to data compiled by Bloomberg.

“It’s going to be a bumpy ride until we see some type of
deal on the fiscal cliff,” said Matt McCormick, who helps
oversee $7.3 billion as a money manager at Cincinnati-based Bahl
& Gaynor Inc. “Speeches and speculation are the drivers of the
market right now. I’m hopeful that we’ll see a resolution, but
the politicians seem to be going a different tune.”

U.S. House Speaker John Boehner repeated his insistence
that President Barack Obama’s budget proposal is “anything
but” balanced and accused the president of being “not
serious” about cutting spending. Obama said the negotiations
are “still a work in progress.” The deadlock in talks to avoid
more than $600 billion in tax increases and spending cuts will
start taking effect in January unless Congress averts them.

Further Talks

Obama and Boehner were scheduled to meet today at the White
House at 5 p.m. Washington time for further budget talks,
according to a spokesman for the speaker.

Applications for jobless benefits fell by 29,000 to 343,000
in the week ended Dec. 8. Economists forecast 369,000 claims.
Retail sales in the U.S. rose in November as demand for
automobiles rebounded and holiday shoppers snapped up
electronics and clothes. Wholesale prices in the U.S. fell more
than forecast in November, reflecting the biggest drop in the
cost of energy since March 2009.

The Federal Reserve said yesterday it would buy $45 billion
of Treasuries per month starting in January in an effort to
boost growth. Interest rates will stay low “at least as long”
as unemployment remains above 6.5 percent and if inflation is
projected to be no more than 2.5 percent, it said.

Greece Relief

European governments geared up to provide extra aid or debt
relief for Greece after releasing the country’s first loan
payment in six months, signaling renewed battles over how to
stabilize the euro economy. Euro-area finance ministers approved
the payout of 49.1 billion euros ($64 billion) of loans through
March and committed to “additional measures” in case Greece’s
debt reduction veers off track.

All 10 groups in the S&P 500 retreated today as health-care, energy and technology companies had the biggest losses.
Newmont Mining dropped 2.9 percent to $44.17. Mosaic, the
largest U.S. fertilizer producer, slid 1.4 percent to $55.63.

Phillips 66 slid 1.6 percent to $52.21. The company plans
to hold the IPO in the second half of 2013 for units in a
master-limited partnership, or MLP, and use the proceeds to pay
for expansion of its oil and natural gas transportation
operations, the Houston-based company said today in a statement.

Best Buy

Best Buy jumped 16 percent to $14.12. Schulze will submit
an offer to the board before the Dec. 16 deadline, the
Minneapolis Star-Tribune reported, citing a person it didn’t
name. The bid will be about $5 billion to $6 billion, the
newspaper said.

Clearwire Corp. surged 15 percent to $3.16 as Sprint Nextel
Corp. offered to take it over in a $2.1 billion deal. Sprint,
which already owns more than 50 percent of Clearwire, is seeking
to acquire the remaining shares at $2.90 each, according to a
regulatory filing today. That’s 5.5 percent more than the
stock’s closing price in New York yesterday.

BlackBerry 10

Research In Motion Ltd. added 4.1 percent to $13.86 after
saying U.S. Immigration and Customs Enforcement will test its
new BlackBerry 10 devices early next year, becoming one of the
first government agencies to try the new operating system.

PBF Energy Inc. advanced 1 percent to $26.25, paring an
earlier rally of as much as 8.4 percent. The oil refiner backed
by First Reserve Management LP and Blackstone Group LP climbed
after raising $533 million in an initial public offering that
valued the company at $2.52 billion.

Warren Buffett’s Berkshire Hathaway Inc. placed a higher
floor under its stock by raising the price limit for share
repurchases, according to Whitney Tilson, a co-founder and
managing director of T2 Partners LLC. Berkshire’s Class A stock
has closed higher than the original ceiling since September of
last year, when the insurance and investment company began the
buyback program.

Berkshire said yesterday that it’s now willing to pay as
much as 120 percent of book value for its two classes of common
shares, rather than 110 percent. Yesterday’s closing prices for
both classes came close to the higher percentage, tied to the
value of assets after subtracting liabilities.

Tilson added to his firm’s stake in Berkshire after the
increase was announced, the New York-based money manager wrote
yesterday in an e-mail. T2 owns Class B stock, according to a
regulatory filing. Each share is equivalent to 1/1,500th of a
Class A share in the company, based in Omaha, Nebraska.

“Needless to say, I’m even happier having this as my
largest position,” he wrote. Berkshire was second to American
International Group Inc. among T2’s biggest holdings at the end
of September, the filing showed.